Southeastern Grocers (SEG) has initiated a strategic divestiture of its business, with Aldi set to acquire all SEG grocery operations under the Winn-Dixie and Harveys Supermarket banners and investment group Fresco Retail Group set to take over the Fresco y Más banner.
Under the proposed merger agreement, Aldi will acquire all outstanding SEG capital stock, which encompasses the Winn-Dixie and Harveys Supermarket grocery operations, in an all-cash transaction.
The acquisition will take Aldi’s already aggressive growth to another level, adding 400 new stores to its roster, primarily in Alabama, Georgia, Louisiana, Mississippi and Florida. Aldi made its U.S. debut in the Southeast in the mid-1990s and the region continues to be a stronghold for the company. Earlier this year, Aldi opened its 26th regional headquarters and distribution center in Loxley, Ala.
Across the country, Aldi plans to open 120 new stores this year, adding to the 139 locations it opened or remodeled in 2022 and bringing its U.S. store total (prior to the SEG acquisition) to more than 2,400. Following the completion of the SEG sale, Aldi will evaluate which locations to convert to the Aldi format; stores that are not converted will continue to be operated by Aldi as Winn-Dixie and Harveys Supermarket stores.
The merger agreement with Aldi has been approved by the holders of a majority of SEG’s outstanding shares and is expected to close in the first half of 2024.
“Like Aldi, Winn-Dixie and Harveys Supermarket have long histories and many loyal customers in the Southeast, and we look forward to serving them in the years to come,” said Jason Hart, CEO of Aldi in a statement. “The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills. The transaction supports our long-term growth strategy across the United States.”
Southeastern Grocers emerged from bankruptcy in 2018, shuttering 94 stores to free up capital for a revitalization of its business. Then in 2021, the company sold 62 of its Bi-Lo and Harveys Supermarket stores to Food Lion and later that year withdrew its plans for an IPO. That same year, all remaining Bi-Lo banners that had not been acquired were shuttered.
The sale of SEG’s third retail banner, Fresco y Más, to Fresco Retail Group is set to be completed in the first quarter of 2024. Fresco Retail Group plans to continue operating the chain’s 28 stores and four pharmacies as they are operated presently.
Until both transactions are completed, SEG will continue to operate its respective banners and stores in the normal course of business. Additional financial details of the two deals were not disclosed.
“Our successful transformational journey has created a unique opportunity with leading partners who share our vision and common commitments to creating value for their customers,” said Anthony Hucker, President and CEO of Southeastern Grocers in a statement. “We believe these next steps will fuel a phenomenal experience for our customers, new opportunities for our associates and increased value for our shareholders.”